Briefs of the Day: Law Professor Amici Weigh In on the Chevron Injunction
Posted on July 6, 2011
H/T to International Law Grrls and Opinio Juris for their posts on dueling amicus briefs in Chevron Corp. v. Naranjo, the case now on appeal in the Second Circuit, in which Chevron sought and obtained a preliminary injunction barring the Lago Agrio plaintiffs from seeking recognition and enforcement of the multi-billion dollar Ecuadorian judgment against Chevron anywhere in the world except in Ecuador. The brief in support of the Lago Agrio plaintiffs is here. The brief in support of Chevron is here. An index of our previous coverage of the Lago Agrio case is here, and my posts on the injunction itself are here and here.
The briefs both address four issues: (1) whether the injunction runs afoul of the principle of non-intervention; (2) whether the district court could properly exercise jurisdiction over the Lago Agrio plaintiffs under international law; (3) whether the injunction offended the principle of comity; and (4) whether Chevron was required to exhaust its remedies in Ecuador. The brief in favor of Chevron also contains a discussion of antisuit injunctions around the world, in both common law and civil law systems.
According to the brief in favor of the LAPs, the injunction offends the principle of non-intervention, because it interferes with the relationship between Ecuador and other countries by prohibiting other countries from considering whether to recognize and enforce the Ecuadorian judgment.
The brief in favor of Chevron accepts the principle of non-intervention but argues that it is inapplicable here. They argue that non-intervention almost invariably has to do with “actual or threatened military action” or “other coercive measures.” They assert that the LAP professors’ failure to cite any precedents not involving military intervention or coercive measure shows that “there is no state practice or opinio juris against [the use of antisuit injunctions] under customary international law.”
Neither brief makes the point, but it seems to me that it’s also relevant to look at who is enjoined in an antisuit injunction. It is not the courts of the foreign state; it is individual litigants. If the court can properly exercise jurisdiction over a litigant, both as a matter of US law and as a matter of international law, then it seems to me that the court can enjoin the litigant. And to the extent the litigant has an objection, it should be that the US court was wrong to exercise jurisdiction over him or her in the first place (because he or she lacks contacts with the United States, etc.), not that the court’s exercise of jurisdiction to enjoin a foreign lawsuit improperly interferes with the other state’s affairs. As this suggests, I think that Chevron’s amici have the better of the argument on this point. But maybe I’m just displaying my bias towards the common law way of thinking about this!
The brief in favor of the LAPs argues that under Section 421 of the Restatement (Third) of the Foreign Relations Law of the United States, the court exceeded the permissible bounds of its jurisdiction to adjudicate claims against the LAPs because the relationship between the US and the LAPs was insufficient to make the exercise of jurisdiction reasonable. According to the brief, the court should have applied the balancing test from F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004), and application of that test would have led the court to conclude that the exercise of jurisdiction to adjudicate was unreasonable.
The brief in favor of Chevron argues that the LAP professors’ brief is simply confused on this point, and that Hoffman-La Roche had to do with jurisdiction to prescribe—jurisdiction to make laws with extraterritorial effect, governed by Section 403 of the Restatement—rather than jurisdiction to adjudicate—the international law equivalent of personal jurisdiction. The Chevron brief’s reading of Hoffman-La Roche seems correct to me on its face. One point of interest not addressed in the briefs is the issue of waiver. Judge Kaplan held that most of the LAPs had waived the defense of lack of personal jurisdiction by failing to assert it within the time required by Rule 12. But these defendants had not appeared in the case at all, and I think Judge Kaplan was simply wrong to say that the failure to appear and answer the complaint could itself constitute a waiver of the defense of lack of personal jurisdiction. 5C Wright & Miller § 1391 n.41 (3d ed.). But suppose they had waived the defense even though they failed to appear. Then I would wonder whether waiver of the defense under New York law implied waiver of the cognate defense under international law.
This, I think, is the strongest point in favor of the Lago Agrio plaintiffs’ position. Chevron argues that the injunction will not offend “amicable working relationships” with other countries because New York is the “natural forum” for the challenge to recognition, there are no concurrent proceedings in other countries, and no country has objected to the antisuit injunction. These seem relatively weak points. Perhaps the reason there are no concurrent proceedings is that the Lago Agrio plaintiffs have been enjoined! And I’m not sure we would expect foreign countries to have somehow complained about the injunction—courts are busy enough adjudicating the cases before them without opining on cases they would like to hear.
The argument in favor of the Lago Agrio plaintiffs seems stronger. The brief makes the point that Judge Kaplan’s injunction has the effect of making the US the exclusive forum for deciding the enforceability of the Ecuadorian judgment outside Ecuador. I would add the point I made in my prior post: if the Ecuadorian judgment is as bad as Chevron says it is, why not trust foreign courts to recognize that fact? Why would Judge Kaplan think that foreign judges are more likely than he is to want to enforce the judgment?
The Lago Agrio plaintiffs’ amici argue that Chevron should have been required to exhaust its appellate remedies in Ecuador first. It’s not clear, though, whether Ecuador offers any means to address the harm Chevron alleges it will suffer on account of foreign recognition and enforcement proceedings even if the judgment is finally overturned in Ecuador, namely the expense and burden of defending multiple suits around the world. So without knowing more about Ecuadorian law, I’m not sure I find this point persuasive. Chevron’s amici argue simply that the exhaustion requirement doesn’t apply except in particular contexts such as “claims alleging a violation of international law directed against States before an international tribunal”, not present here.